Exposure Draft on IRDAI(Insurance Services by Common Public Service Centers) Regulations, 2018

Background

Reference is drawn to IRDAI (InsuranceServices by Common Service Centres) Regulations, 2015, that enables CSC-SPV todistribute insurance products. It is observed that the above regulations arevery specific to the CSC which is established under the National e-Governanceplan by M/s CSC E-governance Services India Ltd.

Requests from StateGovernment entities

1.           TheAuthority has also been receiving requests from entities such as mee-seva ofTelengana and other states to allow them to distribute insurance products underthe insurance CSC Model.

2.           It isnoted that similar state level entities have been set-up by State Governmentsto promote various Government to consumer services and business to consumerservices. These being State Government entities can also be leveraged upon forinsurance distribution.

Rationale for amendment

1.    The CSC Regulations wereissued in 2015. After that the Authority has issued other guidelines such as IMF,POS, Corporate Agents and MISP, thereby, creating new distribution channelswhich facilitates the spread of insurance. These channels have wider optionsin terms of sum insured and product categories. Moreover, the process ofproduct approval is much simpler.

Proposal

In light of the various development inthe distribution space, the insurance CSC-model though being a pioneer in 2015has become outdated and requires reforms and improvement keeping with the changingtimes.

A review of the regulation may thereforebe undertaken to streamline the regulatory framework and also facilitate StateGovernment sponsored entities to participate in the distribution of insuranceproducts.

The draft contains, amongst the others,the following changes:

Objective and definitions

1)        Statingthe objective of the regulations

2)        Renamingthe Regulations to IRDAI (Insurance Services by Common Public Service Centres)Regulations, 2018

3)        Redefining“Common Service Centres” as “Common Public Service Centres” to include"Common Service Centre" established under National e- Governance Planby M/s CSC e-Governance Services India Limited or similar centers establishedby the Special Purpose Vehicle of respective State Governments.

4)        Defining“Common Public Service Centre” is an office place authorized by the CPSC-SPV tofacilitate delivery of government, private and social sector services tocitizens of India.

5)        Deletingreference to CSC Product.

6)        Defining “Village LevelEntrepreneur-Ins" (VLE-Ins) is a VLE who can sell simple over the counterinsurance products

7)        ReplacingCSC-SPV with CPSC-SPV

8)        Replacementof the word “license” with the words “certificate of registration” in line withAct requirements.

9)        Thedraft regulations will supercede the existing IRDA (Insurance Services byCommon Service Centre) Regulations, 2015.

Issuanceof new certificates of registration and renewal of certificate of registration

1.    Introduction of newregulation on issuance of duplicate certificate of registration

2.    Increase in fees for newregistration from Rs 5,000/- to Rs 10,000/-

3.    Increase in fees for renewalof registration from Rs 1,000/- to Rs 2,000/-

4.   VLE-Insqualification, training and examination requirements on par with POS.

5.    VLE-Ins code of conduct, functions,obligations same as RAP

6.    No other change

CorporateGovernance

7.   CSCentitled to remuneration and rewards on par with other insurance intermediaries

8.   Deletionof onboarding charges

9.   RAP cansell all products available to insurance agents including POS products

10. VLE-Inscan sell only POS products

11. Referenceto training methodology, certification and online examination deleted

12.  RAP also allowed to sell allmicro-insurance products, term insurance products and all government schemesunderwritten by insurers.

Others

13.  Revision in reporting formats

14.  Principal Officer, RAP, VLE-Ins to havecertificate based on Aadhaar No. in order to develop a common database for allintermediaries

You are requested to kindly offer your comments/suggestions on the proposed regulations for consideration of the same by thedepartment.  Please ensure that your comments/ suggestions in MS-WORDformat reach us by 5^th September, 2018 in the format attached by e-mailat sanjay at irda dot gov dot in andcsc at irda dot gov dot in

(RandipSingh Jagpal)

ChiefGeneral Manager

14.08.2018